GBP/USD remains in weekly range, ahead of a decisive week in the UK
|- Cable flat for the week, hovering around 2018 lows.
- Volatility expected next week around GBP crosses on Brexit events.
The GBP/USD pair is trading around 1.2740/50, at the same level it closed a week ago. Recently printed a fresh daily low at 1.2725, despite US dollar weakens. The pound remains under pressure in the market ahead of next week crucial Brexit vote.
Today the pair peaked at 1.2789 following the release of the US jobs report that came in below expectations. Data showed the US economy created 155K jobs in November, missing estimates at 200K. Average Hourly Earnings expanded at 0.2%, under the 0.3% expected and October’s numbers were revised lower. The greenback lost momentum across the board after the report, particularly against emerging market currencies.
After a brief spike higher, GBP/USD pulled back to the 1.2750 area, unable to benefit from the weaker US Dollar. The pair is moving with a bearish bias, but price action is limited with volume vanishing ahead of the weekend.
Week ahead
Next week, data to be released in the US includes the CPI and PMI. Numbers will be scrutinized in light of the next FOMC meeting to take place December 18/19. Today’s jobs data showed a solid labor market but in light with recent market concerns about a slowdown.
In the UK, the next few days will be critical. The key event is the Brexit deal vote in the House of Commons on Tuesday. “As it is widely expected the vote will fail (more than 400 MPs have said they reject the deal), we will look at 1) how close the vote is and 2) what happens afterwards over the next couple of days. Note that PM Theresa May is participating in the EU summit beginning on Thursday, where she gets the opportunity to talk to her European peers again”, said Danske Bank analysts.
Economic data from the UK next week includes GDP on Monday and labor market on Tuesday, but it is likely to be overshadowed by the events related to Brexit.
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